Mortgage rates jump most since April, sending the 30-year fixed loan to 6.32%
It’s the biggest one-week rise since April as borrowing costs climb along with 10-year Treasury yields topping 4% this week
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MORTGAGE rates in the US rose for a second straight week, reaching the highest level since early September.
The average for a 30-year fixed loan was 6.32 per cent, up from 6.12 per cent last week, Freddie Mac said on Thursday (Oct 10).
It was the biggest one-week jump since April.
Borrowing costs climbed along with 10-year Treasury yields, which topped 4 per cent this week after robust September jobs data spurred traders to scale back expectations for aggressive Federal Reserve interest-rate cuts.
A key measure of inflation for last month rose more than forecast, boosting bets that the Fed will opt for a smaller reduction in November.
“The rise in rates is largely due to shifts in expectations and not the underlying economy, which has been strong for most of the year,” Sam Khater, Freddie Mac’s chief economist, said. “Although higher rates make affordability more challenging, it shows the economic strength that should continue to support the recovery of the housing market.”
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About 84 per cent of current mortgages have a rate of 6 per cent or lower, according to a recent analysis by Realtor.com.
Borrowers who have been waiting for costs to fall below that level before listing their homes for sale and purchasing new ones – and prospective first-time buyers in search of affordability – may now find reason to hesitate even longer.
But for some potential buyers, now may be a good time to act because more favourable rates may not materialise any time soon, according to Melissa Cohn, regional vice-president of William Raveis Mortgage.
“This is a wake-up call, saying that no, you better find a house you want to buy and then worry about rates secondly,” she said.
“You cannot wait for a rate that may never exist,” she added. BLOOMBERG
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